Nexus: Solidarity Economics – A Path Forward

By David Cobb

In the inaugural “Nexus” column, we shared our belief that we could not create a sustainable and regenerative society under capitalism. Almost all the responses we received were in agreement, but pushed us to describe a path forward. So this month’s column is dedicated to concrete, achievable policies grounded in cooperative, democratic and sustainable values. This framework is often described as a “solidarity economy” that would place people and planet before profit.

Worker-Owned cooperatives

 Thanks to COVID, the unemployment rate is soaring and most of us are teetering on the brink of personal financial disaster.  Worker-owned co-ops could change that.

  • Studies show that on average worker-owned cooperatives outperform traditional businesses in terms of industry average wages and benefits, productivity, job stability and satisfaction  
  • Worker co-ops are locally rooted and tend to prioritize giving back to the community (7th Cooperative Principle). 
  • Co-ops tend to boost civic engagement, a spillover effect of workers running their own business. 
  • A growing movement: 
    • A number of cities (NYC, Madison) are investing millions of dollars in worker co-ops as part of a strategy of inclusive economic development. 
    • A recent $32 million grant was awarded to 4 national co-op developers to encourage and support the wave of baby boomer small business owners who are approaching retirement, to sell their businesses to their workers. 
    • Locally, Cooperation Humboldt has launched a program called “Worker-Owned Humboldt” to support existing co-ops and to incubate new ones. 

Community Land Trusts (CLTs)

In a country as wealthy as the U.S, the level of homelessness is appalling. Over ½ million people experienced homelessness in a single night in 2018 (and that was before COVID and the wave of evictions and foreclosures coming.)

Housing is unaffordable because it is being treated as a commodity (something to be bought and sold) rather than a basic need and a right. Speculation (gambling) on the housing market plays havoc with the availability of affordable housing, and leads to speculative bubbles that crash the economy such as the meltdown in 2008.  Community Land Trusts could change that.

  • CLTs decommodify land and housing by taking them out of the speculative market, thereby creating permanently affordable housing. 
  • CLTs enable low and moderate income individuals/families to own their own home by leveraging grants and subsidies as well as providing a long term land lease at a nominal cost. 
  • Foreclosure rates for CLTs is as much as 90% lower than conventional housing. 
  • Generally, at least 30% of the CLT Board is composed of community members, thereby ensuring democratic, community control. 

Local Energy Democracy

The Intergovernmental Panel on Climate Change projects catastrophic impacts on human and environmental systems unless world governments can transform global energy infrastructure within the next 12 years. Despite the existential threat, fossil fuel industries continue to exploit human and environmental resources for shareholder profit, with impacts on the health and livelihoods of low income and other vulnerable communities worldwide. In fact, two hundred years of extracting natural and human resources to fuel a global economy have created dual crises: a climate crisis and a crisis of inequality. Locally developed and governed renewable energy systems (energy democracy) could change that. 

Energy democracy can encompass various strategies and look different in different places, but is driven by a common set of principles and broad vision. By capitalizing on the decentralized potential of renewable energy resources, energy democracy transfers control over the energy economy to communities/stakeholders, for example through community-based public entities or cooperatives. 

  • By democratizing as well as decarbonizing the energy economy, local renewable energy systems make it possible to share the benefits of moving off fossil fuels. Energy democracy can channel energy assets, employment opportunities and cost savings to disadvantaged communities where they are most needed, reversing histories of dispossession.
  • Energy democracy requires institutional, social and economic innovation, which disrupts business-as-usual practices with pathways to a more just and sustainable future.


Public Banking

Privately-owned banks operate to maximize shareholder profit.  They frequently invest in projects that accelerate the climate climate crisis and exacerbate income inequality in pursuit of  short-term profits. In addition, investment decisions for local communities are often made by Wall Street bankers who have never even visited that community. Public Banking could change that.

  • A Public Bank is operated in the public interest and owned by the people through their representative governments. They are a way to democratize public financial decisions.
  • A Public Bank can be used to finance climate change solutions.
  • Public Banks can make low-interest loans for affordable housing, local businesses and student loans.
  • Public banks can reduce taxes. Their profits are returned to the general fund and they do not need to charge interest to themselves. Eliminating interest reduces the cost of such public infrastructure projects as much as 40%.
  • California already allows the creation of local and regional public banks. Pending legislation (AB 310) would create a statewide CA State Bank. 


Participatory Budgeting 

Public budget decisions have enormous impact on our lives, but the process for how those budgets are created  is incomprehensible and inaccessible to most people. Budget decisions often fail to address community needs, and instead meet the demands of those with the most power or loudest voices. This disconnect fuels some of the biggest problems with our democracy, especially record-low participation and trust in government. Participatory Budgeting could change that.

Participatory Budgeting ensures that all voices have a place at the table by allowing participants to work together across partisan divides for the good of their communities, while increasing government accountability. 

  • Participatory Budgeting makes government more effective, fair and innovative. It connects residents’ local knowledge with technical expertise, directing resources toward public priorities. Low income people, people of color and youth participate at higher rates than in typical elections, and learn valuable civic skills and knowledge. This participation often leads to creative new projects that push broader policy change.
  • People all over the world are using Participatory Budgeting, proposing, developing and voting on legislation. Some are using “citizen assemblies” to change the way government works. In the U.S., many cities have allowed hundreds of thousands of people to directly decide how to spend hundreds of millions of dollars in public funds via Participatory Budgeting.

None of these policies alone are transformational. Together, they represent an opportunity to reshape our world.